Prepping for Super Bowl victory means weighing economics of losing

Before the Broncos play the Panthers, some companies are hedging their bets by investing in both teams to minimize a loss

Nick Jones, senior production manager at Out of the Blue printers, checks the order of gray T-shirts that arrived for the company to print if the Denver Broncos win Super Bowl 50 on Sunday. (Cyrus McCrimmon, The Denver Post)

Employees at Out of the Blue on Sunday will be watching Super Bowl 50 on the small office TV anxiously waiting on the final score.

"If they don't win, everything is contractual," said owner Blue Grimes, whose Denver shop for the first time has a deal to print NFL-licensed shirts. "We still get paid."

Betting on a Broncos victory could be financially rewarding. But for every business in a rush to get merchandise to stores and consumers, someone, somewhere is taking a risk in the hope of a super payoff.

"We pretty much have to," said Scott Franklin, the Broncos' general manager for Gameday Merchandising, which runs the team store at Sports Authority Field at Mile High. "We'd look pretty bad if the team store didn't have championship gear after the game. You hedge your bet."

Think of it as the economics of coming in second.

Confetti doesn't just fall from the sky. Fireworks need preparation. Stores must schedule staffers for late shifts if the local team wins.

Before the AFC championship two weeks ago, Dick's Sporting Goods ordered shirts declaring both the Broncos and the New England Patriots AFC winners.

When the Broncos won, Dick's kept several Denver-area stores open late that night to sell the shirts. But in Boston, employees went home and inaccurate Patriot-as-AFC-champs shirts were donated to charity.

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That's just part of the game, said Brandon Yergey, community marketing manager for Dick's.

"Providing excited fans with championship gear immediately following big games outweighs the costs of being prepared for both outcomes," Yergey said. "Through our long-standing partnership with the humanitarian organization World Vision, we donate any unused championship merchandise to countries in need."

The company Sports Authority also sold Broncos AFC champions shirts that night at area stores. The Englewood-based retailer did not respond to requests for a comment.

Gearing up for a conference or a Super Bowl victory goes beyond shirts and hats. Design teams create new images, which must be approved by the NFL. Merchandisers must get sample products to the league. Celebration plans must be made.

"Just magically, champagne is there, and guess what? Both teams set up their locker rooms, but one of them will have to tear it down," said Dan Price, co-founder of Adrenalin, a Denver marketing and design agency specializing in sports. "There is all kinds of merchandise out there that people make, but my sense is, short of a hat or shirt, a lot of that isn't made until longer after the game. I don't think anyone is going out and taking the risk of making replica championship rings. They have time to do that afterward."

(By the way, the NFL, unlike Major League Baseball, doesn't allow alcohol in locker rooms.)

Blowout

Two years ago, when the Broncos lost 43-8 to Seattle in Super Bowl XLVIII, the gamble hurt some Denver businesses terribly.

"As a Broncos fan, that hurt. As a business, that hurt worse," said Baumgart, who chalks up the overordering of shirts to inexperience. "(Sales) just stopped entirely. Losing a game doesn't turn off a lot of people. But the way we lost that game, people didn't want to think about the Broncos at all."

Smirk couldn't afford to keep the unused shirts. "We didn't preprint, which I'm thankful for," he said. It was cheaper to return the shirts for a refund and pay a restocking fee.

This year, Smirk has fewer new designs but plans to add some gold flair. Presses are ready, silk-screening screens are burned. Blank tees — about half the investment from two years ago — should arrive Monday, long after the game between the Broncos and the Carolina Panthers is over.

"We've ordered more moderately. We have things set up in case we need to ramp up really quick," he said. "But we're not throwing it all in."

There are ways to recoup a gamble gone wrong: Don't print before the game ends. Negotiate terms in case of a loss. Kill fees and tax write-offs may help ease the pain.

But if you are in the business where fresh merchandise must be available to frenzied fans right after the game, there will always be risk.

"It's a sizable investment, a five-figure investment that we risk" for preprinting Super Bowl merchandise, said Franklin, with Gameday Merchandising. "We did the same for the AFC championship. We will have hats and T-shirts available for sale after the game at Sports Authority Field."

If the Broncos win, the team store will set up a trailer near gates 9 and 10 for fans who want to get the first T-shirts. Other team stores will open early Monday.

"We've got hundreds of other items on an if-when basis. Those begin to ship the day after, on Monday," he said. "The vast majority of Super Bowl orders never get made until we win. The minute the team wins the Super Bowl, we go into action."

By waiting a few days, fans will get better selection and quality products, said Jim Kelleher, owner of promotional-product maker Tops of Rockies.

"If you're going to spend $60 to $80 on a hoodie after the Broncos win the Super Bowl, I'd wait a couple of days because you'll have other (design) options that are better," he said. "If you're a big fan, wait 24 hours and you'll get a better quality shirt, too."

Entertainment

Then there is the entertainment. For the AFC championship against the Patriots, the host Broncos covered the cost.

Liz Coates, the Broncos' game entertainment manager, said she began planning AFC festivities during week 16, after the Broncos clinched the playoffs.

She got a stage for the trophy presentation, made sure two confetti cannons were secured and got everyone to a dress rehearsal the day before the game. Fireworks were handled by the team's regular pyrotechnics company, Pyromix. The NFL took care of the trophy and stand and organized a celebration for the visiting team — just in case.

"The players aren't (at rehearsal), but stadium security, NFL security, CBS and everyone else are," Coates said. "We run through both scenarios. We brought out the stage, the trophy stand and set up the camera platforms."

If the Broncos had lost, the stage and confetti cannons would have remained hidden. But costs are the same regardless of who wins, and Coates said the proposed budget for the AFC halftime show and trophy presentation was about $185,000 — including confetti cleanup.

"It's basically the same budget because you incur the same expenses whether you use it or not," said Coates, who gets to attend Super Bowl 50 as a fan.

Even the losers

Then there are companies such as Jell-O, which gambled on the loser of Super Bowl XLVII. A TV commercial congratulating the losing 49ers fans aired on network TV after the game. Thirty-six hours later, the company set up "Pudding Drops" around San Francisco and handed out free pudding. A video commemorated the campaign.

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